In this time of economic uncertainty, when is it time to start or continue through the City entitlement process?
The answer to the question is not so straightforward and is dependent upon a number of variables such as (a) the timing of the real estate market, (b) the true value of the land, (c) whether or not there is debt on the property, (d) the patience level of the lender, (e) the amount of debt, and (f) when the loan matures.
Let’s examine one example:
A property owner has a zoning category that doesn’t have a lot of value compared to the amount of debt on the property. If the owner does nothing it is highly unlikely anyone will be interested in the property because the zoning is too restrictive for today’s marketplace. The result of this could be that no sales or purchaser/tenant/investor interest is generated. This in turn may lead to an eventual foreclosure proceeding and a possible deficiency judgment. The one advantage the Owner has is that he has time to rezone the property. If he chooses this route he would probably increase the value of the land and start marketing and selling parcels.
The large question facing the property owner is:
“Do I spend the money to rezone the property? And, what happens if that still doesn’t work, and now I have spent a substantial amount of money and I could still be facing a deficiency judgment?”
Obviously, these issues are of critical concern to the property owner and simply stated, this is where a good market study and an entitlement professional can help to give the property owner an understanding of the market place, the appropriate entitlement for the property, sales price expectations, and the time and process for proceeding through the City zoning web.
If the property owner feels a comfort level with the outcome of the two analyses then it may be in his best interest to proceed.
For further information call (602)- 330-8470 Gary Lane, AICP at LBG Development, we have “unmatched experience in every facet of development.” or write your questions and comments to info@LBGDevelopment.com.
Office – (480)-474-4385 Mobile – (602)-330-8470 Fax – (480)-814-0628